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TMI Blog2023 (5) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... ich approves the resolution plan filed by Respondents 3 & 4 ('R-3 & R-4') that discriminates between the operational creditors who are similarly placed, and also discriminates between the operational creditors and the financial creditors in respect of payments under the approved resolution plan. Respondent No. 1 'Rajkumar Poddar' (R-1) is the Resolution Professional ('RP') of the corporate debtor 'Vadraj Energy (Guj) Limited'. 2. In brief, the facts of the case are that the Appellant Company is an operational creditor of the corporate debtor and in the Corporate Insolvency Resolution Process (in short 'CIRP') of the corporate debtor initiated on 08.01.2020, the Appellant filed its claim along with 'Form-B' containing proof of the claim to the Interim Resolution Professional ('IRP') vide letter dated 29.01.2020, and its claim amounting to Rs.2,53,85,908/- related to the operational debt with regard to the operations and maintenance services provided by the Appellant to the corporate debtor in its power plants. 3. The Appellant has further submitted that the work orders and invoices relating to the operational debt were submitted by him along with claim form vide letter dated 29.01 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecord. 7. The Learned Counsel for the Appellant has submitted that the CIRP against the corporate debtor Vadraj Energy (Guj) Limited was initiated on 08.01.2020, whereafter a public announcement was published in the newspapers asking the creditors of the corporate debtor to submit their claims with proofs to the IRP, and so the Appellant, through letter dated 29.01.2020, submitted its claim amounting to Rs.2,53,85,908/- along with proof of the claim. This claim was regarding the operational debt owed by the corporate debtor to the Appellant regarding operation and maintenance services provided by the Appellant to the corporate debtor in its power plants. The Learned Counsel for the Appellant has further submitted that the RP, after examining the claim submitted by the Appellant, informed the Appellant that its claim amounting to Rs.1,13,63,918/- was admitted. Thereafter the Appellant submitted further proof regarding the balance amount which was not admitted but he was informed by the RP that no claim submitted beyond 30.06.2020 would be considered. He has further submitted that much later, vide email dated 15.10.2021, the Appellant was informed by the RP that a resolution plan wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e extent of Rs.1,13,63,918/- and if the Appellant was not satisfied with the amount admitted he could have approached the Adjudicating Authority in Appeal, but he neither approached the Adjudicating Authority nor raised any issue about rejection of the balance amount from the amount claimed by him. On the basis of the admitted claims, a resolution plan was submitted by Respondents No. 2 & 3, which was duly examined by the RP and finally approved by the CoC in its meeting dated 23.08.2021 with 100% voting share. He has claimed that the Appellant never raised any objection or challenge to the contents of the resolution plan or the approval thereof by the CoC, and is now coming at a very late stage, after the resolution plan was approved by the Adjudicating Authority, raising objection about the amount of his admitted claim and also the payments envisaged in the resolution plan. 12. The Learned Counsel for the Respondent/RP has further submitted that duty of the RP has to merely examine and ensure that the resolution plan meets the requirements of Section 30(2) and this duty was performed sincerely and diligently by the RP whereafter the CoC approved the modified resolution plan in i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and further Explanation I to clause (b) of Section 30(2) lays down that a distribution which is in accordance with the provisions of the clause (b) shall be considered as fair and equitable to the operational creditors. He has argued that this is how the distribution to operational creditors has been dealt in the resolution plan. He has also argued that the Appellant did not challenge the admission of his reduced claim at the time when the Appellant received information about the admission of its claim, and the same cannot be challenged now at a much later stage, particularly after the approval of the resolution plan. In support he has cited the judgment of Hon'ble Supreme Court in the matter of Jaypee Kingston Boulevard Apartments Welfare Association & Ors. Vs. NBCC (India) Limited & Ors., [(2022 (1) SCC 401] regarding any possible discrimination between the payments to operational creditors and financial creditors. He has referred to the judgement of the Hon'ble Supreme Court in the matter of K. Sashidhar (Supra) to emphasize that the appeal to NCLAT regarding the approval of resolution plan is to be done only to the limited extent whether the plan meets with the requirements o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08.2020, which was replied to by the RP by email dated 02.09.2020 (attached at Page 163 of the Appeal Paper Book), which is as follows: "Dear Sir, This is with reference to your email dt. 08.08.2020 with respect to your claim on subject CD. We have been informed by the ex-management that after 30.06.2020 the plant was closed and nothing was required to be done. Further, there was nobody who was authorize to sing any documents and hence, your Invoices post June 2018 are not tenable and thus not acceptable. Therefore, only amount of Rs.1,13,63,918/- is admitted. Thanking You. Raj Kumar Poddar Resolution Professional of Vadraj Energy (Gujarat) Limited" 18. Thus, it is quite clear that the Appellant had been informed without any ambiguity and with clarity that since the power plant was closed w.e.f. 30.06.2020, only an amount of Rs.1,13,63,918/- was admitted against his submitted claim. We further note that through email dated 15.10.2021, the RP informed the Appellant that NCLT, Ahmedabad had approved the resolution plan for the corporate debtor vide its order dated 07.10.2021 and his admitted claim has received 'NIL' allocation as per the approved resolution plan. 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be specified by the Board which shall not be less than- (i) the amount to be paid to such creditors in the event of a liquidation of the corporate debtor under Section 53; or (ii) the amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance with the order of priority in sub-section (1) of Section 53, whichever is higher, and provides for the payment of debts of financial creditors, who do not vote in favour of the resolution plan, in such manner as may be specified by the Board, which shall not be less than the amount to be paid to such creditors in accordance with sub-section (1) of Section 53 in the event of a liquidation of the corporate debtor. Explanation 1.-For removal of doubts, it is hereby clarified that a distribution in accordance with the provisions of this clause shall be fair and equitable to such creditors." 22. It is seen that the resolution plan proposed payments to the operational creditors including Appellant as 'NIL', which was in accordance with the liquidation value of the corporate debtor. Thus the payments to operational creditors in the approved resolution p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... what to pay and how much to pay each class or sub-class of creditors is with the Committee of Creditors, but, the decision of such Committee must reflect the fact that it has taken into account maximising the value of the assets of the corporate debtor and the fact that it has adequately balanced the interests of all stakeholders including operational creditors. This being the case, judicial review of the Adjudicating Authority that the resolution plan as approved by the Committee of Creditors has met the requirements referred to in Section 30(2) would include judicial review that is mentioned in Section 30(2)(e), as the provisions of the Code are also provisions of law for the time being in force. Thus, while the Adjudicating Authority cannot interfere on merits with the commercial decision taken by the Committee of Creditors, the limited judicial review available is to see that the Committee of Creditors has taken into account the fact that the corporate debtor needs to keep going as a going concern during the insolvency resolution process; that it needs to maximise the value of its assets; and that the interests of all stakeholders including operational creditors has been taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncial creditors, cannot secure their own dues at the cost of statutory dues owed to any Government or Governmental Authority or for that matter, any other dues." 27. The Judgement in the matter of State Tax Officer (1)(Supra) lays down that the members of CoC cannot secure their own dues at the cost of statutory dues owed to government or governmental authority or any other dues. It is also laid down in section 53 that payment to various creditors is to be done in accordance with a distribution scheme as specified therein, and furthermore the payment to operational creditors is to be done in accordance with Section 30(2)(b) of the Code. In such a situation, it is clear that the law lays down a certain manner in which payment to operational creditors and other creditors have to be made and if a resolution plan envisages payment in accordance with these provisions, such payments cannot be said to be not in accordance with law or to contravene any of the provisions of the law. 28. In light of the above, we don't see any reason why the resolution plan approved by the Impugned Order should be interfered with, and therefore, we dismiss the appeal. 29. In the facts of the case, there i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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